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December 4 - December 27, 2020
Against the intention of the authors of neoliberal theory, this metaphor essentializes the object of critique: the market becomes a thing capable of being liberated by agents, instead of being, as neoliberals themselves believed, a set of relationships that rely on an institutional framework.
Geneva School neoliberals disagreed with this narrative. To their mind, commitments to national sovereignty and autonomy were dangerous if taken seriously.
They were stalwart critics of national sovereignty, believing that after empire, nations must remain embedded in an international institutional order that safeguarded capital and protected its right to move throughout the world.
the neoliberal world order required enforceable isonomy—or “same law,” as Hayek would later call it—against the illusion of autonomy, or “own law.”
I argue that we can understand the proposal of the Geneva School as a rethinking of ordoliberalism at the scale of the world. We might call it ordoglobalism.
The nation could be useful insofar as it provided services of stabilization (which would often include restrictions to migration) and cultivated legitimacy in the political sphere.
it is wrong to see neoliberals as critics of the state per se but correct to see them as perennial skeptics of the nation-state.
the following chapters show, an essential aspect of the project of neoliberalism was determining how to preempt the opposition by building an extra-economic framework that would secure the continued existence of capitalism.
what the neoliberals envisaged and fought for was an ongoing settlement between imperium and dominium while pushing policies to deepen the power of competition to shape and direct human life.
not a borderless market without states but ...
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There needed to be a respect for private property that trumped national law. Investment must be able to cross borders back and forth without fear of obstacles or expropriation.
Capital needed to become cosmopolitan again.
key institution in rebuilding what Mises called the “shattered world” of the global economy was the ICC, founded in Paris in 1920.
ICC emerged as an amalgam of two developments in the late nineteenth century: international cartels and international statistical associations.
The international statistical associations began with the International Statistical Institute, which was formed in 1885 and was the first entity to collate global statistics.
Haberler wrote that “military language, containing expressions such as ‘economic front’ and ‘defensive positions,’ is especially inappropriate to the analysis of problems of international trade and of division of labor between countries.… It suggests that a ‘front’ of economic conflict lies always between two countries, whereas in reality the conflict is between groups having different interests within each country.”
“then one sees a tendency prevail over the entire earth toward equalization of the rate of return on capital and of the wage of labor.
Then, finally, there no longer are poorer and richer nations but only more densely and less densely settled and cultivated countries.”
Alongside suggestions to lift prohibitions on imports and ports, Mises suggested privatizing public enterprises, eliminating food subsidies, and, consistent with his belief in free movement, lifting entry and residence restrictions for foreigners.
The main argument for free trade was the international division of labor, but “freedom of migration does not exist, has never existed and probably never will exist.” It would not be desirable even if it were possible. The Ruhr Valley would become unbelievably crowded, and the Alps would empty out entirely: “One need not be a nationalist for such things to be undesirable.” Haberler proposed that he could prove that “free trade is beneficial for all even when there is no freedom of migration and the peoples remain firmly rooted in their countries.”
The workers themselves were neutral containers of the attribute of labor, as capable of relocation as a chunk of investment capital or a carriage-load of coal.
Haberler saw labor as sticky but highly versatile when forced to move. He praised workers for their ability to adapt but condemned them for wanting to stay in place.
His theory of comparative costs suggested that free trade could compensate for the absence of international labor migration as long as internal barriers established by unions were struck down.
Even as techniques of planning gained traction both in Geneva and in the mainstream of the economics profession by the end of the 1930s, neoliberals rallied around the belief that neither statistics, nor mathematically informed theory, nor the nascent science of econometrics would suffice to forecast or stave off future crises.
Robbins sought a form of human social organization that would clarify the distinction between the political and economic realms and dissolve the small, discrete collective of mutual identification—the miners or the Papuans—in a larger unity.
What was necessary was a political form to fill the vacuum created by the British abdication of the role, especially after the Ottawa Agreements of 1932, which created preferential access for Great Britain to its colonies and commonwealth.
If the British had broken the liberal order once by leaving the gold standard in 1931, they had done so again the following year by turning colonial borders into economic walls.
As he said, “National planning involves not merely the suspension of laissez faire as regards movements of trade and investment. It involves also the suspension of laissez passer as regards the movements of men.”
The provision of benefits by the state, he observed, means the restriction of free movement to retain control over who benefited.
Hayek’s proposals for global governance had been largely passed over until scholars recently rediscovered, in his proposals for federalism, the “reinvention of liberal internationalism” and the implicit—and even explicit—inspiration for European economic integration.60 Wolfgang Streeck writes that Hayek’s work “reads like a blueprint for today’s European Union”
Reflecting in 1978, Hayek wrote, “I think the first paper I ever wrote … was on a thing which had already occurred to me in the last few days in the army, suggesting that you might have a double government, a cultural and an economic government.” He said that this occurred to him as one way to resolve “the conflict between nationalities in the Austro-Hungarian Empire.” He wondered if “it might be possible in governmental functions to separate the two things—let the nationalities have their own cultural arrangements and yet let the central government provide the framework of a common economic
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Mises’s most explicit proposals for supranational federation hewed closely to the borders of the former empire, and he expressed skepticism about a larger-scale “democratic world government” or a federation that would span continents.
“The surface of the earth is divided among nations. This division is the result of past historical processes. It does not correspond to current conditions of production and population. Under full free movement of people and goods, there are nations whose areas would be more densely and others more thinly settled. This relative overpopulation must be dissolved now through movements of migration.”
Only the colorful—and powerless—representatives of national policy would be seen. A double government would serve as a model of supranational federation.
In Eucken and Röpke’s understanding, economic nationalism was not an irrational hysteria or an artifact of psychological manipulation but a rational attempt by the diverse groups within a nation to use their political influence—electoral and otherwise—to secure the maximum economic advantages from the state.
Röpke floated here the possibility that forms of authoritarian government may be necessary—or are at least conceivable—to counteract the degeneration of economic policy produced by mass democracy.
They must become “mere administrative demarcation lines,” and national governments must “have only limited powers over their populations.”
Cortney’s rhetorical move was to reframe the question from an economic matter into a matter of human rights. He linked capital control to the right to leave a country as such. Because “the right to leave a country is for all practical purposes, meaningless unless one is entitled to take with him belongings,” he argued that one must under all circumstances be allowed to exchange and export capital.
Cortney described the right to emigrate as the “basis of all his other human rights,”
by linking it to its necessary prerequisite: the right of free capital movement.
Cortney stood out for linking his claim of the human right of capital movement to the right to leave.
Geneva School neoliberals insisted that governing a territory did not mean owning the property within it.
In 1952 Mises observed the irony of the disavowed symmetry between Global South and North when he said, “If it is right for the British to nationalize the British coal mines, it cannot be wrong for the Iranians to nationalize the Iranian oil industry. If Mr. Attlee were consistent, he would have congratulated the Iranians on their great socialist achievement.”
Modern international investment treaties now largely resemble the Abs-Shawcross “Draft.”
In the 1990s the number of bilateral investment treaties, based on the original one between West Germany and Pakistan, quintupled to nearly 2,000.
In the aftermath of the Second World War, as international law was being rethought to accommodate the problem of the stateless and the refugee, international economic law was being formulated to protect the rights of what one contemporary called “refugee money” and the human right of capital flight.
Against what he saw as the materialism of the idea of economic development, he posed the importance of “moral infrastructure.”15 Some populations, he argued, had the traits required for success in a system of global capitalism, others did not—and little could change this fact.
Economic actors voting with their feet—and their assets—would be the surest corrective on projects of building domestic welfare states.
“overindustrialization and underagriculturization of the world.”
Global division of labour
He explained global disparities in wealth through cultural essentialism, writing that “the ‘rich’ countries of today are rich because, along with the necessary prerequisites of modern technology and its industrial use, they have a particular form of economic organization that responds to their spirit [Geist].”
Weber, others with similar culturalist arguments
